Have an Upside Down Car Loan? How to Sell a Car When You Owe More Than it’s Worth

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We hear it all the time: A new car buyer is in an upside down car loan. But what does that mean? What are the ramifications? And if you want to trade or sell your car, what are your options?  

Since new cars depreciate faster than used cars, typically about 20% the first year and as much as 60% within 5 years, buyers can owe more on a car than it is worth. If you have buyers remorse or for some other reason decide you can’t keep your car, you’ll likely end up losing money on the deal. 

But, it can be less painful than you might think. Here is what you need to know about selling a car when you owe more than it is worth, or, in an upside down car loan. 

This story is 100% human researched and written based on actual first-person knowledge, extensive experience and expertise on the subject of cars and trucks. No AI was used.

Know How Much You Owe on an Upside Down Car Loan

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Know Your Car’s Value 

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Is it Worth Holding On For a Bit Longer?

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Consider Refinancing Your Car

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Sell Your Car to Someone Who Will Pay Off the Loan or Lien

Learn how much money car dealerships really make on car sales and other ways they make the money that keeps them in business. Use this information to shop smart! avoid upside down car loan
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Get a Lien Release Letter From Your Lender

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Negotiate your New Car Separately From Your Financing, Including a Lien Rollover

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Gap Insurance Can Protect Your Upside Down Car Loan in a Crash or Theft

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Talk To a Lender You Trust Before Doing Anything

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Journalist, entrepreneur and mom. Expertise includes new cars, family cars, 3-row SUVs, child passenger car seats and automotive careers ... More about Scotty Reiss
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